Radio Frequency Identification: Additional Considerations for Retailers

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Since our first update on Radio Frequency Identification (RFID), retailers have found additional uses for the new technology. RFID is a high-tech version of a barcode: it is a small, digital tag placed on an item allowing retailers to track everything from inventory to expiration dates. Recently, though, retailers have found ways to drastically improve productivity using the technology.

Apparel retailers can use RFID tags placed in clothing, shoes, and accessory items to more quickly and accurately take inventory. RFID allows employees to keep track of inventory simply by scanning an RFID reader over an entire shelf or rack of products, rather than manually scanning each item’s individual barcode. The time savings can be substantial: what could take 53 hours using manually-scanned barcodes takes only two hours using RFID technology, a 96 percent reduction in time.

As the time required to inventory items decreases, the frequency of inventory counting can increase, allowing for much more accurate inventory counts. The RFID Research Center reports that an RFID system can improve inventory accuracy by more than 27 percent, further saving retailers’ time and money. Inventory accuracy is important to consumers, too, especially with the increase in online shopping: for consumers who browse online and want to purchase or try on items in-store, it is important that a store’s inventory be accurately reflected on its website.

RFID, however, offers more possibilities than merely identifying and counting items. Delta Air Lines uses high-end RFID tags to track expiration dates on its oxygen generators, a process that used to take eight hours but now takes less than two minutes. By decreasing the time spent on inventory tasks, retailers are able to reallocate time and labor resources to better serve their customers.

RFID is already improving the retail market, but as it becomes more widespread, it has incomparable potential: we might one day have a world where checking out at a store means placing the items you wish to purchase through an RFID reader and immediately being told the price owed. This would save valuable time for retailers and consumers alike. And with RFID tags often costing less than 25 cents, this is technology retailers likely see as worth the investment.

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